Mortgage Industry Fights Back on Regulations
The mortgage industry has recently faced tighter regulations because of its instrumental role in the housing crisis. In response, the industry has begun to fight back, arguing that at a time of tight credit, more stringent rules could create more paperwork, lawsuits, and thus more costly mortgages. While proposals are still in the works, the Fed expects to reach its final rules and any new mortgage regulations by this summer.
For details on this story, please visit:
http://www.nytimes.com/2008/04/28/business/28mortgage.html?th&emc=th
posted by Editor in Chief at 12:00 PM
2 Comments:
It is my opinion that the wiz kids of the indusrty are on board in formulating the new regulations.
It is hoped that these new regulations be directed to those who have created & have the potential to create new versions of the "sub prime" mortgages. Make the regulations tough for those on the top of the food chain so that crap do not filter down to the retail lenders(brokers).
The brokers have been unfairly maligned & singled out by the media and by extension the public at large as the culprit.
It should be noted that the brokers are the messengers in the sub-prime loan fiasco.
Let's give credit to those that deserve it- the bright boys of wall street. It is they who created & developed the underwriting criteria for the sub-prime loans and it is they who packaged/sold these intstruments. Is they who leveraged these instruments and it they who earned billions not the brokers.
To date I have not seen any of these bright boys doing the "perp walk".
There seem to be no detrrent to such bad behavior,
Maybe we will see some teeth & fairness to the new regulations.
As to the Legislation proposed in all areas of lending is loaded with good suggestions and a few bad ones. The Federal Goverment once again has failed to enforce existing laws and if proposals are passed they will once again not regulate.
The problem once again is the secondary market. When more than 30% of the homeowners can not qualify for a conventional product the Sub-Prime borrowers are not able to payoff or refinance existing obligations.
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